Multiple choice questions about economic model, opportunity cost, production possibilities frontier.
1) When building a model, economists ______.
a) simplify reality in order to highlight illustrate what really matters
b) attempt to duplicate reality in all its complexity
c) ignore the facts, and instead try to determine illustrate what the facts should be
d) do all of the above
2) With business, a country may ______.
a) consume outside its production possibilities frontier
b) consume inside its production possibilities frontier
c) find its production possibilities frontier will shift outward
d) do none of the above
3) All points on the production possibilities frontier represent _______.
a) efficient production points
b) inefficient production points
c) non-feasible production points
d) economic growth
4) The production possibilities frontier is bowed-out from the origin, because ______.
a) resources are not equally suited for the production of both goods
b) resources are scarce
c) economic growth leads to inefficiency
d) resources are inefficiently used
5) The opportunity cost of production ______.
a) is the price of a good
b) is illustrate what you give up to capable to produce the good
c) decreases as production increases
d) both b and c